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AUD/NZD: Client flows suggest further upside - Westpac

FXStreet (Bali) - Richard Franulovich, FX Strategist at Westpac, notes that the relative flow picture, as per Westpac's client flows, seems to argue strongly in favour of yet more medium upside for the AUD/NZD cross.

Key Quotes

"The slides overleaf show Westpac's active client flows in AUD and NZD, both shorter term and longer."

"Our short term flow gauge for AUD suggests the currency has absorbed its fair share of net selling. At -2.0 z-scores the 20 day net flow trend is about as weak as it typically gets."

"Our longer term flow gauge for AUD tells much the same story – appetite for the currency has been lacklustre."

"Our short term flow gauge for NZD has been very volatile in recent months and a clear trend is difficult to discern. That said, the latest data point does not suggest the currency is dramatically oversold, far from it."

"The longer term 60 day flow gauge for NZD also suggests a fair amount of exposure still needs to be unwound."

"The relative flow picture seems to argue strongly in favour of yet more medium upside for the AUD/NZD cross."

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